11/04/2014 12:22 EST | Updated 01/04/2015 05:59 EST

Car insurance fraud charge triggers urgent warning from police

Police and people who work in the auto insurance industry have a message to drivers who think they're getting a deal on cut-rate insurance policies.

"If someone offers you insurance in a donut shop, rather than in their office, you really have to question the legitimacy of the transaction," said Richard Dubin of the Insurance Bureau of Canada (IBC).  "A red flag should go up immediately."

The warning is prompted by an arrest last week of a man police allege was selling false insurance documents to drivers who thought they were purchasing a legitimate car insurance policy.

Facing two counts of fraud and two counts of uttering a forged document is Alexandr Chertin, 73.

Police allege he sold fake insurance cards, known as pink slips, to unsuspecting buyers. 

In fact what drivers purchased — largely in cash transactions — were falsified documents.

As a result, police estimate about 100 people are driving without valid insurance.

"These people believe they are operating their vehicles with valid insurance and they are not," said Toronto police Det. Robert Ermacora on Monday.

In some cases, drivers learned they were uninsured when they tried to file claims. In other cases, police spotted the forgeries at routine traffic stops.

Police say there are victims all over the Toronto area.

Chertin was released on $7,500 bail and is due back in court later this month.

So how can drivers know they're buying a legitimate insurance policy and not a forged insurance documents?

Dubin said consumers can check with the IBC website. People who suspected they've been scammed can call the tip line at 1-877-422-8477.

He said drivers should be suspicious of any policy sold outside an insurance company's office in a cut-rate cash deal.

"If it seems too good to be true it probably is," he said.